New Realities

Opportunities on a scale not seen in decades are emerging for chemical makers, David Weidman, chairman and CEO of Celanese told attendees in accepting the Society of the Chemical Industry (SCI) American Section’s Chemical Industry Medal in New York last week.

“I am incredibly optimistic about where the U.S. chemical industry is going,” Weidman says. “The next 10-15 years offer opportunities that are unprecedented in my career.”

Two “new realities” drive the opportunity, Weidman says. The first is surging global demand powered by rapid development and urbanization in Asia, particularly China. The second is the improved competitive position of the U.S. chemical industry due to the abundance of shale gas. “We are benefitting from one of the most dramatic energy developments in the last half century,” Weidman says. The U.S. seemed to be running out of gas only a few years ago and today it is so plentiful that gas is being flared in Texas and North Dakota. “With natural gas so reasonably priced, we not only are in a strong position to compete in fast-growing overseas markets, we might even dream of a growing U.S. manufacturing base.”

Industry also faces substantial challenges that will transform business. “Perhaps the most dramatic is sophisticated competition from sovereign state-owned enterprises and quasi-public/private companies in Asia and the Middle East,” Weidman says. New players are now moving from the regional to global stage and “often follow destabilizing strategies,” he says.

Industry’s leaders will need different management skills in this changing environment. “Tomorrow’s leaders must be better than my generation in three important ways: strategic thinking, global agility, and employee engagement,” Weidman argues.

Investing in new facilities, entering new, growing markets or developing new technologies can take years, Weidman notes. “Our new competition thinks and acts on that timescale. In my view, our long-term incentive timeframe needs to be longer than the traditional two or three years.”

Future success will require companies to hire and train executives with the ability to get work done in any region of the world. And leaders must improve employee engagement, he says. “Leaders must address the needs of the Facebook generation,” Weidman says. “This includes not just their desire for immediacy and connectivity, but also their interest in giving back to their communities, working for a higher purpose, and continuously learning.”

It is a time for great opportunity, Weidman adds. “It’s time to move beyond ‘polish the stone’ strategies and embrace the ‘new normal.’”